REC Silicon ASA ("REC Silicon" or the "Company") announces the entering into a
full-form supply agreement between its subsidiary REC Solar Grade Silicon LLC
and Hanwha Q Cells Georgia, Inc., ("Hanwha") a wholly owned subsidiary of
Hanwha Solutions for a 10-year take-or-pay supply agreement for high purity
FBR granular polysilicon produced from REC Silicon's facility at Moses Lake,
Washington (the "Supply Agreement").
To secure the Supply Agreement obligations and to support the restart of the
Moses Lake facility, Hanwha will make sizeable prepayments at the time of the
signing of the Supply Agreement and at first delivery.
- The prepayments are important to REC Silicon's overall financing plan, and
the full-form supply agreement was an imperative milestone for the reopening
of the Moses Lake facility. As previously stated, it was important to have a
high-quality offtake partner and we have that in Hanwha Q Cells. We are
pleased with the terms and now look forward to a successful restart of the
plant. The process remains on schedule and budget for a re-start by November
1, 2023, with an ambition to reach full capacity utilization by year end 2024,
says Kurt Levens CEO of REC Silicon.
The Supply Agreement provides for the sale to Hanwha of 100% of the prime
high-purity granular production from the facility and replaces the binding
term sheet between the parties that was announced on January 31, 2023.
Prepayments will be credited against purchases of polysilicon pursuant to a
linear reimbursement schedule over the 10-year term. The estimated total
value of the Supply Agreement for the duration of the arrangement will
fluctuate depending on market prices, which are currently estimated to be
approximately $3 billion.
The base price for the FBR granular polysilicon in the Supply Agreement will
be determined by market indices (representative of markets outside and inside
of China) adjusted for a premium for US-sourced low-carbon material. The
high-purity FBR granular polysilicon will also benefit from the $3 per
kilogram tax credit from the Inflation Reduction Act. For the first five
years of the agreement, the base price is subject to both a price minimum and
maximum that protects REC Silicon against potential low market prices in the
near term. For the second five years of the agreement, there is no minimum or
maximum price, which provides the Company with upside to benefit from higher
polysilicon market prices in the future.
As a leading producer of Silicon Gases and High Purity Polysilicon, REC
Silicon is well positioned to capitalize on the global megatrends of
digitalization, energy transition and energy storage and provide crucial
material inputs to the IRA, Chips and Infrastructure Acts. The company has
developed a strong market position in the Semiconductor industry based on its
operations in Butte. The re-opening of the Moses Lake operations will enable
REC Silicon to provide High Purity Polysilicon to an emerging US solar value
chain and together with the Butte operation potentially supply Silane gas for
anode material to a fast-growing battery industry.
Please find attached an announcement as required pursuant to Section 3-19 of
the Norwegian Public Limited Liability Companies Act, which regulation applies
whenever a subsidiary of a public company such as REC Silicon ASA enters into
a qualifying material agreement with a related party. The announcement will
also be available on the Company's website.
Contacts
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Jack Yun
CFO
Email: jack.yun@recsilicon.com
Nils O. Kjerstad
IR Contact
Phone: +47 9135 6659
Email: nils.kjerstad@recsilicon.com
About Us
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REC Silicon is a leading producer of advanced silicon materials, delivering
high-purity polysilicon and silicon gas to the solar and electronics
industries worldwide. We combine over 30 years of experience and proprietary
technology with the needs of our customers, with annual production capacity of
more than 20,000 MT of polysilicon from our two US-based manufacturing plants.
Listed on the Oslo Stock Exchange (ticker: RECSI), the Company is
headquartered in Lysaker, Norway.
For more information, go to: www.recsilicon.com
This information has been submitted pursuant to the Securities Trading Act ยง
5-12 and MAR Article 19 no. 3. The information was submitted for publication
at 2023-09-06 08:20 CEST.